Federal Reserve System

Federal Reserve Audit
S.3217 Restoring American Financial Stability Act of 2010

After negotiation in both the House and Senate, Congress was able to come to an agreement regarding further disclosure of the federal reserve. "Members of a House-Senate conference committee agreed to grant the Government Accountability Office broad authority to examine the operations of the Fed and to require additional disclosures from the central bank." "The Fed, which persuaded lawmakers not to reduce its political autonomy and bank supervision powers, will still have to expose its inner workings to public view more than ever before in its 96-year history. Lawmakers faulted the central bank for lax supervision before the financial crisis and demanded transparency on its more than $2 trillion in loans."

"The conference committee accepted the Senate's language that would require the Fed to make available on its website the conditions of the loans, including interest rates and collateral posted, that were issued by the special facilities created during the financial crisis. This will allow members of the public and the media to scrutinize these loans to ensure that proper practices were followed. The Fed will also be obligated to disclose the conditions of loans from special facilities created in the future. Unfortunately, the wording on this future disclosure requirement could lead to a delay of many years between the issuance of the loans and any public disclosure or a GAO audit. The conference committee also agreed to require the Fed to disclose its discount window transactions and open market operations after a two-year lag. This reverses a previous insistence by the Fed that these transactions must be protected from disclosure."

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